Thai central bank creating its own crypto currency
The Bank of Thailand (BoT) is diving into the digital currents by creating its own crypto currency to expedite transactions between banks. The central bank is embracing the new technology even as it carefully regulates digital money to protect consumers from potential fraud and volatility.
The BoT developed the prototype, the Retail Central Bank Digital Currency (CBDC), for interbank payments. Central bank officials have said that the digital currency has the potential to form the foundation of Thailand’s future financial infrastructure. The BoT has also created a sandbox for commercial banks to experiment with digital currencies.
Thailand is steadily moving towards becoming a less-cash, if not a completely cashless society. A key element in this transition is the government’s PromptPay, a digital platform where consumers can pay bills and make other financial transactions.
Vachira Arromdee, Assistant Governor of the BoT, said that digital transactions have increased significantly since the introduction of PromptPay, aside from other app-based digital payment systems.
Private trading of crypto currencies is gaining in popularity in Thailand despite strict regulations and limits by the banking and financial authorities.
The Bank of Thailand said that the local crypto currency market has grown exponentially. The trading volume of domestic crypto currency exchanges has increased 17 times from $143 million in 2018 to $2.49 billion in 2020. The BoT attributes the rise to speculative investment and the increased clarity of its regulations.
The Bank has been taking a cautious approach on consumer crypto currencies because it said that their volatility and possible vulnerability to cyber attacks make them riskier for the general public than standard digital payments.
Photo courtesy of: https://www.bot.or.th/Thai/digitalcurrency/documents/bot_retailcbdcpaper.pdf